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U.S. Appears Headed for a Peanut Surplus
Yahoo - AP ^ | August 9, 2005 | ELLIOTT MINOR

Posted on 08/09/2005 10:24:44 AM PDT by Hi Heels

U.S. Appears Headed for a Peanut Surplus By ELLIOTT MINOR, Associated Press Writer Tue Aug 9, 5:35 AM ET

ALBANY, Ga. - Peanuts in storage plus peanuts in the field.

Right now, the United States has too many peanuts and that, experts say, could be bad news for the peanut commodity program unless something is done to whittle down the piles.

"We're afraid if we cost the government a lot of money, we'll get less in the next farm bill," said Tyron Spearman, executive director of the National Peanut Buying Points Association.

Some 215,000 tons of peanuts are still unsold from the 2004 crop and agricultural officials predict growers will produce another 2.3 million tons this year, Spearman said.

Despite recent growth in peanut consumption, Americans use only about 1.6 million tons a year and another 300,000 to 400,000 tons are exported.

That leaves a surplus of about 485,000 tons.

Farmers won't lose because their government crop program guarantees them $355 per ton. The losers could be federal taxpayers who pay the difference between the guaranteed price and the actual market value of the peanuts.

Low peanut prices increase government costs, while higher prices reduce government costs.

Last year's 2.1 million ton crop peanut crop has already cost the government $320 million, said Spearman, who spoke Friday at the Georgia Peanut Producers Association's annual buying point meeting. The 416 buying points stretching from New Mexico to Virginia buy peanuts from the farmer and grade them before shipping them to shelling plants or storage warehouses.

Georgia Sen. Saxby Chambliss (news, bio, voting record), chairman of the Senate Agriculture Committee, addressed legislative issues and the outlook for the new farm bill, which will be approved by Congress in 2007.

Costly commodity programs tend to be singled out in Congress, but Chambliss said the 2002 Farm Bill, which created the new peanut program, is successful and the peanut program has been a bargain most years.

"There's always somebody who wants to take a shot at the peanut program," said Chambliss, who challenged the industry to find new uses of peanuts.

Peanut acreage has increased after the elimination of the old Depression-era peanut program in 2002. That opened the door for peanut farming in new areas.

This year, more farmers opted to grow peanuts because it seemed to have the best economic potential when compared with cotton, corn and soybeans, Spearman said. As a result, peanut acreage increased 25 percent in Georgia and 15 percent nationwide.

Growers have been grumbling for several years that the U.S. Department of Agriculture's "posted price," the price U.S. peanuts can be sold on the world market, is too high and is pricing American peanuts out of the market. The current posted price is $337 per ton.

Stanley Fletcher, a University of Georgia agricultural economist who specializes in peanuts, said USDA officials could increase demand for American peanuts by lowering the posted price, but it would increase government costs.

"If we don't move the prices, we're going to have a lot sitting there," he said in a phone interview Thursday. "Prices have to move down to move them into the marketplace."

Spearman said U.S. shelled peanuts are currently selling for $850 per metric ton in Europe, compared with $695 per ton for peanuts from Argentina and $725 per ton for peanuts from China.

"Everybody is looking for an answer, but no one knows what the USDA is going to do," Spearman said.

Chambliss, noting that he'd been given a golf shirt made from corn the day before in Minnesota, urged the industry to "get creative" and increase peanut demand.

Then, reflecting on potential uses of peanuts, he said, "I don't know if we can make golf shirts out of it."


TOPICS: Business/Economy; US: Georgia
KEYWORDS: 109th; agriculture; oilfornuts; peanutgallery; peanuts; usda
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Crisis after Crisis today.....
1 posted on 08/09/2005 10:24:48 AM PDT by Hi Heels
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To: Hi Heels

Blame the airlines for switching to pretzels. ;o)


2 posted on 08/09/2005 10:25:35 AM PDT by al_c
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To: Hi Heels

Never mind all that. When will I see the price of my favorite peanut butter come down? :)


3 posted on 08/09/2005 10:25:54 AM PDT by fatnotlazy
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To: Hi Heels

4 posted on 08/09/2005 10:26:08 AM PDT by Paleo Conservative (France is an example of retrograde chordate evolution.)
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To: Hi Heels

Not Bush's fault........this one falls on Carter!


5 posted on 08/09/2005 10:27:23 AM PDT by Prolifeconservative (If there is another terrorist attack, the womb is a very unsafe place to hide.)
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To: Hi Heels

Not shocking news really. The U.S. has always been full of lefty "GOOBERS".


6 posted on 08/09/2005 10:27:23 AM PDT by ladtx ( "Remember your regiment and follow your officers." Captain Charles May, 2d Dragoons, 9 May 1846)
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To: Hi Heels

May I have a few pounds, please...


7 posted on 08/09/2005 10:29:27 AM PDT by Lurking in Kansas (Nothing witty hereā€¦ move on.)
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To: Lurking in Kansas

EAT A SNICKERS FOR HEAVENS SAKE!!!!!!!!


8 posted on 08/09/2005 10:30:15 AM PDT by TXBSAFH (NHL legend Conn Smythe: "If you can't beat 'em in the alley, you can't beat 'em on the ice.")
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To: Hi Heels

Yeah, one Carter too many........


9 posted on 08/09/2005 10:30:18 AM PDT by Red Badger (Want to be surprised? GOOOOGLE your own name. Want to have fun? GOOOOGLE your neighbor's......)
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To: Hi Heels
Oh, for the invention of the Goober Combustion Engine...


10 posted on 08/09/2005 10:31:07 AM PDT by atomicpossum (Replies should be as pedantic as possible. I love that so much.)
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To: fatnotlazy

"When will I see the price of my favorite peanut butter come down? :)"

Never happen, the government's approach is to destroy the excess product rather than lower the price and get more customers.


11 posted on 08/09/2005 10:31:30 AM PDT by Western Phil
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To: Paleo Conservative

I was going to say: "Insert Jimmah Caa Tah joke here"


12 posted on 08/09/2005 10:31:34 AM PDT by garyhope (Islamofascism wants the death of Western civilization. Simple as that.)
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To: Hi Heels
Farmers won't lose because their government crop program guarantees them $355 per ton. The losers could be federal taxpayers who pay the difference between the guaranteed price and the actual market value of the peanuts.

Well it didn't work for buggy whips but I guess it works for peanuts. I bet Jimmy Carter gets some of my money.

13 posted on 08/09/2005 10:31:57 AM PDT by InterceptPoint
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To: atomicpossum

"Oh, for the invention of the Goober Combustion Engine..."

We already have it; it's called a diesel. Make all them excess goobers into biodiesel?


14 posted on 08/09/2005 10:32:59 AM PDT by RegulatorCountry (Esse Quam Videre)
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To: Hi Heels
Peanuts make peanut oil.

Peanut oil can be refined.

Refined oil can be put into cars.

I'lll have the honey-roasted unsalted 94-octane, please.

15 posted on 08/09/2005 10:33:07 AM PDT by Lazamataz (Islam is merely Nazism without the snappy fashion sense.)
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To: Hi Heels
Not my fault!!

I enjoy my share of Planters lightly salted.

16 posted on 08/09/2005 10:33:07 AM PDT by Churchillspirit (Anaheim Angels - 2002 World Series Champions)
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To: Hi Heels

I bet peanut oil would run one of those diesels.


17 posted on 08/09/2005 10:33:19 AM PDT by stuartcr (Everything happens as God wants it to.....otherwise, things would be different.)
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To: al_c
Blame the airlines for switching to pretzels. ;o)

Actually, the recent attention to "peanut allergies" is likely to blame... Our county school district will not allow any peanut products in to classrooms starting in the '05-'06... Peanuts are really starting to scare people for some reason...

18 posted on 08/09/2005 10:34:40 AM PDT by vrwinger (http://www.freeiPods.com/?r=19973915)
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To: Lazamataz

If only there was a jelly surplus. *sigh*


19 posted on 08/09/2005 10:34:56 AM PDT by Hi Heels (Guns kill and cause crime? Dang, mine must be malfunctioning....)
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To: Hi Heels
Seeing as how a surplus of a product without a matching demand generally drastically lowers the price, what is everyone's consensus on what peanut prices at MAJOR LEAGUE BASEBALL games will do in the future?

I predict 20% price INCREASES.

20 posted on 08/09/2005 10:36:32 AM PDT by xrp (Fox News Channel: ALL ARUBA ALL THE TIME)
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